Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified

RingCentral

(

RNG

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified RingCentral as such a stock due to the following factors:

  • RNG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.0 million.
  • RNG has traded 523,984 shares today.
  • RNG is trading at 35.99 times the normal volume for the stock at this time of day.
  • RNG is trading at a new high 13.02% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on RNG:

RingCentral, Inc. provides software-as-a-service solutions for business communications primarily in the United States. Currently there are 8 analysts that rate RingCentral a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for RingCentral has been 566,800 shares per day over the past 30 days. RingCentral has a market cap of $958.8 million and is part of the technology sector and computer software & services industry. Shares are up 20% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates RingCentral as a

sell

. The area that we feel has been the company's primary weakness has been its feeble growth in its earnings per share.

Highlights from the ratings report include:

  • RINGCENTRAL INC has improved earnings per share by 25.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, RINGCENTRAL INC reported poor results of -$0.73 versus -$0.37 in the prior year. This year, the market expects an improvement in earnings (-$0.23 versus -$0.73).
  • Compared to other companies in the Wireless Telecommunication Services industry and the overall market, RINGCENTRAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for RINGCENTRAL INC is currently very high, coming in at 73.48%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -16.24% is in-line with the industry average.
  • Net operating cash flow has significantly increased by 72.10% to -$0.69 million when compared to the same quarter last year. In addition, RINGCENTRAL INC has also vastly surpassed the industry average cash flow growth rate of -31.74%.
  • Investors have driven up the company's shares by 28.90% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the future course of this stock, we feel that the risks involved in investing in RNG do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

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